Teamster retirees' insurance faces cuts

November 01, 2008|By JOSHUA BOWMAN

TRI-STATE - Citing an increase in health insurance costs, Teamsters Local 992 next year will cancel a decades-old Medicare supplemental insurance plan it offers to retired union members.

The cut, which will take place Jan. 1, 2009, will affect more than 350 union retirees who will have to get the supplemental insurance from other insurance providers, according to union leaders who talked about the decision Friday.

No changes are planned for the union's pension plan or its health plan for members not eligible for Medicare, which typically is available once retirees turn 65, union leaders said Friday.

The Local 992, off Sharpsburg Pike south of Hagerstown, represents more than 1,000 workers in Maryland, Pennsylvania and West Virginia.

Under the Medicare supplemental plan, retired union members who use Medicare can pay $150 per month for supplemental insurance to cover what is known as the Medicare gap, or the 20 percent of medical costs not covered by the federal insurance program.


The supplemental plan is available to retired union members and their spouses.

Ron Fischer, a retiree who sits on the union's health, welfare and pension board, said the decision to suspend the service was an economic one.

Fischer said premiums paid by union members last year covered less than half of the $1.5 million it cost Local 992 to provide Medicare supplemental insurance, which has been offered by the union for about 40 years.

"We were losing $60,000 a month to provide this service," said Fischer, who noted that the union was covering the gap by dipping into reserve funds.

A letter to union members from the board regarding the change says that the cost of coverage for Medicare-eligible retirees and their spouses has risen by more than 44 percent over the last three years.

By comparison, coverage costs for retirees and spouses who are too young to be eligible for Medicare has risen less than 1 percent, the letter states.

The board began discussing the change in June and decided in September to cancel the insurance, Fischer said.

"Everything was looked at from top to bottom as to what we could do to salvage the fund, in other words, to make the boat float, as they say. And this is where we are," said Tom W. Krause, secretary-treasurer of Local 992.

Krause is a member of the health, welfare and pension board.

The letter to union members included a list of more than 25 companies that provide supplemental Medicare insurance.

While premiums vary, Fischer said some of the companies offer the insurance at a lower rate than the union.

Krause said union members can call the union's fund office at 301-733-2602 with questions about supplemental coverage.

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